It was led by a group of young military officers who were loyal to the Hugo Chávez-led Revolutionary Bolivarian Movement-200 (MBR-200), while Chávez was in prison for the February 1992 coup d'état attempt.

Corruption was also widespread, with crime increasing yearly, making the Venezuelan public, primarily the poor who especially felt neglected, become outraged.

In 1989, President Pérez put these liberalization policies into effect, reducing social spending and many commodity subsidies, and removing longstanding price controls on many goods.

The coup organizers rejected the ruling bipartisanship in Venezuela between the two political parties, Democratic Action and COPEI, which they saw as a corrupt and clientelist establishment.

The Movimiento Bolivariano Revolucionario 200 (MBR-200) was founded in 1982 by Lieutenant Colonel Hugo Chávez Frías, who was later joined by Francisco Arias Cárdenas.

In February 1989 shortly before the Caracazo, Cuban president Fidel Castro allegedly placed sleeper agents in Venezuela to create unrest.

[7] As the Revolutions of 1989 occurred in Soviet states, Castro had allegedly began to organize a coup in late 1989 that would indirectly use sleeper agents who participated in the Caracazo.

The group had contacts with Chávez in prison and had learned some lessons from the February coup's errors, including launching at 4:30 am instead of midnight, and obtaining communications equipment to ensure they would not be stranded without it.

[14] Mirage fighter jets in rebel hands bombed an army barracks west of Caracas; however, the attack had little effect on slowing down the government counterattack.

Carlos Andrés Pérez's government had previously severed diplomatic relations with Peru in April after Fujimori carried out a self-coup the same year.